Issue Briefs

OPM has sent a message to agencies reminding them of an upcoming change in the way unused FERS sick leave credit is counted toward FERS retirement benefits.

As you know the National Defense Authorization Act of 2009 changed the way Unused Sick Leave is credited under the Federal Employee Retirement System (FERS). Since we are approaching the deadline for the FERS Unused Leave credit change we thought it would be important to remind you of the change.

FERS employees who retire on December 31, 2013 will receive 50% credit for their Unused Sick Leave. Employees who retire on January 1, 2014 will receive 100% credit for the FERS Unused Sick Leave and their annuities will commence February 1, 2014.

The information about FERS Unused Sick Leave credit can be found in several locations. One is the sick leave fact sheet and the other is the National Defense Authorization Act Retirement Changes Benefits Administration Letter 10-101. Below is an excerpt from these documents and links to both..

For employees covered by the Federal Employees Retirement System (FERS), credit toward the annuity computation will be based upon a percentage of the sick leave balance at retirement or death, depending on the date the entitlement to the annuity began-

50 percent in the case of an annuity entitlement based on a separation from service from October 28, 2009, through December 31, 2013; and 100 percent in the case of an annuity entitlement based on a separation from service occurring on or after January 1, 2014.

The message references a Benefits Administration Letter which says this:

Credit for unused sick leave under FERS Section 1901 permits unused sick leave to be used as service credit in the computation of benefits under FERS, but not for establishing title to an annuity or in the computation of average salary. Sick leave will be used in the computations in the same manner it is used in CSRS computations. Effective October 28, 2009, individuals separating with title to an immediate annuity or who die leaving a survivor eligible for a survivor annuity

will be entitled to credit for 50 percent of their unused sick leave. Effective for separations and deaths occurring on or after January 1, 2014, 100 percent of the unused sick leave will be available.

The provisions apply to unused sick leave to the individual’s credit under a formal leave system and for which the employee has not received payment. In the case of individuals who have annuities computed under the provisions of both CSRS and FERS, only sick leave not included in the CSRS part of the calculation will be available under FERS. In addition, in the case of an employee who is excepted from subchapter I of chapter 63 under section 6301(2)(x) through (xiii) of title 5, United States Code, (which applies to certain high level officers and employees) the days of unused sick leave include any unused sick leave standing to his or her credit when he or she was excepted from this subchapter.

This new provision is not applicable to Veterans Health Administration nurses who are already entitled to full credit for unused sick leave under prior legislation. The amendments made by section 1901 apply only to annuities based on a separation from service occurring on or after October 28, 2009.